The media’s response to a policy statement or political speech is fairly predictable, often falling into one of two categories. The first is rank political scrutiny—obligingly and bloodlessly placing the statement within the political calculus. It’s an interminable and often spurious exercise, but not without its benefits—policy is refined or coarsened, after all, by its passage through conflicted people.
This “analytical” approach requires a sort of dogged myopia—a determination to read between the lines and elevate humdrum speeches to the ranks of high political drama. It demands speculation that a policy announcement is in fact a subtle leadership challenge, or it must shine an unsubtle light on the slight differences between colleagues’ messages.
The second approach is different. It demands an earnest rebuke or embrace of the politician’s professed values. This is the stuff of opinion pieces, and it seeks an elevated conversation—one about ideas, values, philosophy. Even if the writer is seriously upset with the politician’s position, the piece unwittingly legitimises the statement by accepting that it’s genuinely about ideas, even if they’re wrong.
Joe Hockey recently gave a speech in London to the Institute of Economic Affairs and followed up his speech with an interview on Lateline. The thrust of Hockey’s argument was that much of the world has grown morally and fiscally flabby, revelling in an orgy of government expenditure, and it’s incumbent upon a responsible Australian government to end an “Age of Entitlement”. “We should never,” Hockey said, “have allowed the Age of Entitlement to become a fiscal nightmare.”
The responses were familiar. Many columns pontificated about the political ramifications—was Hockey agitating for the leadership? Why was Hockey’s message slightly different to Abbott’s? You know the stuff: divining meaning from shifting sands. It’s prosaic stuff, but not totally worthless.
The other type of response was satisfied also. For days and days columns were filled with loftier arguments for or against Hockey’s Age of Entitlement. These are the think pieces. The fun stuff. The writing about ideas and values, with barely a dollar sign in sight.
For days—weeks, almost—articles ran against Hockey. Smart, heated tracts about egalitarianism and fairness and history and damn those Tory bastards! And smart, heated tracts ran in support of Hockey, columns about moral hazard, the corrosiveness of entitlement and the value of work.
We wondered if Australia was spoilt or fair. We mused on the meaning of Keynes and Hayek. We examined our souls and our history. But barely a bugger bothered to test whether any of Hockey’s numbers made any sense.
This is what politicians—especially lazy ones—love: the acceptance that they’re sincere and thoughtful, even if you think they’re wrong. Here we were caught in the great drama of our own outrage or agreement, brave intellectual warriors battling for our very own sense of justice, for Australia’s collective heart.
The fact is, we do this because it’s more fun than applying a diligent eye to the economics. We do this because too few writers have bothered to develop a basic understanding of economics—myself included.
The problem is that economic policy is precisely where the “fun stuff”—a party’s professed values and philosophy—should practically reside.
Economist Matt Cowgill, who blogs at We Are All Dead, did bother to check and we should all be grateful that he did. Cowgill’s characteristic sobriety and fondness for graphs tells a very different story. Australia’s social expenditure is, in fact, very low on international comparisons. We are lower than the US, even, spending about 16% of GDP on it compared the States’ 16.2%. France and Sweden are up the top, spending nearly 30% respectively.
Of this 16%, the vast majority—more than two-thirds—is spent on health and aged care, while just 0.4% goes to unemployment benefits. 0.4%! It’s clear that the spectre of the dole bludger looms far larger in our collective imagination than it does in our national accounts.
And while Hockey was deploring the plague of fiscal irresponsibility, here’s a good news story he omitted: Australia has one of the lowest expenditures on social welfare because we spend it a lot smarter—we subject more of our payments to means testing than any other OECD advanced economy. We get more bang for our buck.
But as Cowgill points out, this means there’s not much wriggle room for cuts. If our welfare expenditure is nightmarishly profligate, as Hockey hints at, it’s not quite clear where you’d make the cuts. Aged care and health would, very obviously, have to be the starting points. But you’ll notice Hockey doesn’t mention either.
Hockey relies upon an emotional appeal, not an economic one. He evokes pictures of a generation of slackers, sucking at the teat of a government too lazy and cynical to withdraw itself.
Hockey’s economic laziness works best if we let ourselves become distracted by the pathos. We need to first ask: do the numbers add up? If a party is sincere in its philosophy, then we should be testing that sincerity via the accuracy of the numbers, rather than getting drunk on economically ignorant outrage and thrashing about in the surf of the culture wars.